Unfortunately, theft is more common in Pediatric Practices than most practice owners anticipate. Businesses in general, according to some estimates, lose approximately 7% of revenue due to Theft and Embezzlement. According to a September 2010 article in MGMA Connexion, the magazine produced by the Medical Group Management Association, the Association of Certified Fraud Examiners (ACFE) estimates that the typical organization loses 5% of its revenue each year to fraud. Think that because you run background checks on all hires that you are protected? Think again – in a 2010 ACFE report, 86% of individuals that were charged or convicted of fraud were first time offenders.
Some examples of fraud in a Pediatric Practice include: employees stealing through theft of receipts, cash on hand, disbursements such as forging or altering a check, submitting fictitious invoices, paying personal expenses with company funds, payroll and expense reimbursement. More than 50% of the time the employee stole alone and had 3 or more years of experience.
Using Risk Management principle of trust and verify with proper oversight and systems can mitigate much of the risk. This includes:
1. Assess your processes and monitoring for high risk areas including co-pay management, payroll, reimbursement, patient refunds.
2. Make sure the front desk team and other members understand that there is an on-going audit of these activities (if a partner is monitoring 1 hour/1x per week, there should be enough clarification each month for the employees to understand there is an audit system).
3. Minimize the individuals involved with high risk areas (such as access to banking, payments and payroll) and insure there is a partner in the business that audits this function (recommend switching this role in a larger group so all partners have an equal share in the audit function).
A well-designed Pediatric Practice management system should have the ability to print the co-pay report per day so that the practice can insure that the books balance. This is similar to a bank teller verifying that the cash balances in their drawer. If you are unsure how to use their audit system, obtain some training then implement this with the front desk team each day. If your Practice Management system vendor does not have this function, request that they build this into the software since this is an important function. Insure that your Pediatric practice is not one of the practices that loses a percent of their revenues each month due to not implementing auditing systems and controls. By consistently implementing an appropriate audit system, you can minimize your risk of fraud/theft, protect your practice, and maybe even sleep a little better at night.